Fed Reserve holds rate amid slower US growth

The US Federal Reserve, the world's most important central bank, maintained its benchmark interest rate unchanged for the third time this year, holding them at 0.25-0.50 percent.

The reserve cited the reason of unchanged numbers as slower growth in the US economy even as the labor market strengthens. The Fed stuck to its stance that the US monetary policy will tighten only gradually and gave no hint as to whether it could lift the short-term federal funds rate at its next meeting in June.

At the end of a two-day meeting, it suggested that domestic growth, generally thought to have slowed to about 0.9 percent annual pace in the first quarter and still-weak inflation were its primary concerns.

Since the March meeting, the Federal Open Market Committee (FOMC) said, "Labor market conditions have improved further even as growth in economic activity appears to have slowed."

The decision to keep the benchmark rate unchanged, which influences global dollar interest rates, at an ultra-low 0.25-0.50 percent was expected. But analysts were looking for something that would indicate whether the FOMC might raise rates at its June 14-15 meeting or whether it would remain more concerned about financial market turmoil.

Of the 10 voting members of the FOMC, only Esther George, head of the Fed's Kansas City branch, argued for raising the rate now to 0.50-0.75 percent.